The iPad 3: Why it May Suck

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Product success is all about exceeding expectations. If something is better than we thought it would be, even though it isn’t very good, we are happy; if it misses expectations (even if it is better than something else we liked) we are disappointed. Apple has done an amazing job over the years of setting expectations and then exceeding them. However with the iPhone 4S, even though it was a vast improvement over the successful iPhone 4, people were clearly disappointed.  

I think we are seeing the same thing with Mountain Lion, the new version of the MacOS. People were expecting something like the iOS and were disappointed, while Windows 8, which had lower expectations, appears to be getting more raves.   

So we have had two products come out without Steve Jobs presenting them and expectations were missed; it would seem we have a trend suggesting people will not be pleased with the iPad 3 either even though it will likely be the best iPad ever made. 

Best non-iPad Tablets in Market

There are three tablet products in market that are arguably better than the iPad. The Transformer Prime is more useful with a keyboard docking station that adds a second battery, a vastly better display that can actually work outside, and the NVIDIA Tegra 3 platform which allows it to lead in performance. The new Samsung Galaxy 7.7 tablet that has a stunning Super OMLED display and 4G connectivity showcasing where tablets in that class will likely go. And finally, we have the Kindle Fire, which has become the showcase of a new subsidy model, one where the device is subsidized by what you consume on it, driving ever more aggressive price points.     

This is a daunting class of products as the current iPad isn’t as versatile nor does it perform as well as the Transformer, it isn’t as portable or as strongly connected as the Galaxy 7.7 (it will likely be LTE), and you could buy 2.5 Kindle Fires for what an iPad costs, so it isn’t as affordable either.   

It still leads on eco-system, marketing, and the strength of its brand but in hardware (against these newer offerings) the iPad 2 is looking tired and old.  

iPad 3

The problem for the iPad 3 (which looks to be strong) is it likely can’t embrace all of these new product benchmarks by increasing the depth of the line and significantly improving the hardware. But Apple can’t raise price limiting their ability to fully respond and hold margins. If they bring out a 7” product that will seem to go against Steve Jobs wishes and it is unlikely they will use a display as advanced as Samsung’s in order to approach the Kindle Fire’s price point. The product would likely draw the ire of the Apple fan base who might see it as a betrayal of Jobs and fall short of the competing products both lacking the Samsung’s features and the Kindle Fire’s price.  

For the larger form factor, they will clearly have a better screen but doing much of their own hardware design makes it likely they will lag the Tegra 3 in performance, particularly in graphics. When they decided to do their own chip design in-house, it seemed likely they would begin to lag there because companies like NVIDIA and Qualcomm, much like Intel did in the PC years, tend to move more aggressively because of both the highly competitive nature of their markets and their tight focus on this segment.    

Wrapping   Up: The Best Worst iPad Ever

If Jobs were still around there is no doubt in my mind he’d wrap the iPad 3 and even a possible smaller sibling with enough magic to cause buyers to forget any shortcomings and be amazed. But as we have seen with the iPhone 4S and Mountain Lion, the Apple team just can’t do the magic and that suggests the market will view the iPad 3 as somewhat disappointing. I think Apple will likely still sell every one they have but this disappointment will slowly wean us off the Pavlovian response of lusting after every product that Apple announces. This is bad timing as, in the 4th quarter, they will face a massive wave of Windows 8 tablets that could set the new bar and then iPad sales could stall.    

In the end, I think this announcement will say more about us as consumers than it will about Apple and the iPad. If I’m right and we see it as a disappointment largely because it lacks “magic” which was all in our minds anyway rather than seeing this as the best version of a product we already love it’ll simply showcase how silly we are. Unfortunately, unless pets start buying products or aliens from outer space land on earth, Apple still has to sell to us nutty humans so they’ll have to find a way to get the magic back. God I miss Steve Jobs.  





Edited by Jennifer Russell
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President and Principal Analyst, Enderle Group

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